Edison Investment Research - Tinexta (TNXT) Tinexta - Weak Q324 but valuation appears too pessimistic

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Edison Investment Research

Richard Williamson

Tinexta - Weak Q324 but valuation appears too pessimistic

Tinexta’s weak Q324 results from its Cyber Security (CS) and Business Innovation (BI) divisions have prompted management to downgrade financial guidance for FY24 for the second time this year. We also take a more cautious stance on expected growth in FY25 and FY26. The c 60% decline in the share price in 2024, versus cumulative underlying downgrades of 16% to FY24e adjusted EBITDA, reflects investor concerns about two of Tinexta’s most significant acquisitions in recent years, the CS division and ABF Groupe. An improvement in performance from either would be helpful for sentiment, which appears overly pessimistic.

13/11/2024 1 EN

Underlying

Tinexta

Tinexta SpA, formerly Tecnoinvestimenti SpA, is an Italy-based holding company primarily engaged in the software and Internet services industry. Through its subsidiaries it operates three segments: Digital Trust, Credit Information and Managment, and Innovation and Marketing Services. Digital Trust offers solutions for the digital identity and the dematerialisation of processes with products and services, such as certified electronic mail, electronic archiving, digital signature, electronic invoicing, and solutions for the secure and simplified transmission of legal and financial documents. Credit Information and Managment provides services and products to assess the credit of businesses and individuals, guarantee expected cash flows, and minimise insolvency issues and late payments. Innovation and Marketing Services offers a consultancy platform for enterprises to support them in phases of manufacturing growth and expansion of commercial activites, including abroad.

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IT0005037210 Italy

Provider

Edison Investment Research

Edison is an investment research and advisory company, with offices in North America, Europe, the Middle East and AsiaPac. The heart of Edison is our world renowned equity research platform and deep multi-sector expertise. At Edison Investment Research, our research is widely read by international investors, advisors and stakeholders. Edison Advisors leverages our core research platform to provide differentiated services including investor relations and strategic consulting.

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Analysts

Richard Williamson

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Tinexta - Weak Q324 but valuation appears too pessimistic

Tinexta - Growth affected by temporary issues

Tinexta - Typical seasonality in Q124

Metro Bank - Profitability achieved and targets reiterated

Pan African Resources - Tennant Creek acquisition

Datatec - Operational focus drives H125 profit growth

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